Globalizationsocial change, an increased connectivity among societies and their elements due to, transculturation; the explosive evolution of transport and communication technologies to facilitate international cultural and economic exchange. The term is used in different to apply in various social, cultural, commercial, and economic contexts. "Globalization" can mean:
- The formation of a global village - closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding and friendship between "world citizens",
- Economic globalization - more freedom of trade and increasing relations among members of an industry in different parts of the world (globalization of an industry),
- The negative effects of for-profit multinational corporations - the use of substantial and sophisticated legal and financial means to circumvent the bounds of local laws and standards, in order to leverage the labor and services of unequally-developed regions against each other.
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2 Signs of Globalization
3 Global trade or still international / multilateral trade?
5 Globalization in question
6 See also
8 External links
History of Globalization
Since the word has both technical and political meanings, different groups will have differing histories of "globalization". In general use within the field of economics and political economy, is, however, a history of increasing trade between nations based on stable institutions that allow individuals and firms in different nations to exchange goods with minimal friction.
The term "liberalization" came to mean the combination of laissez faire economic theory with the removal of barriers to the movement of goods. This lead to the increasingly specialization of nations in exports, and the pressure to end protective tarrifs and other barriers to trade. The period of the Gold Standard and liberalization of the 19th century is often called "The First Era of Globalization". Based on the Pax Britannia and the exchange of goods in currencies pegged to specie, this era grew along with industrialization. The theoretical basis was Ricardo's work on comparative advantage and Say's Law of general equilibrium. In essence, it was argued that nations would trade effectively, and that any temporary disruptions in supply or demand would correct themselves automatically. The institution of the Gold Standard came in steps in major industrialized nations between approximately 1850 and 1880, though exactly when various nations were truly on the gold standard is a matter of a great deal of contentious debate.
The "First Era of Globalization" is said to have broken down in stages beginning with the First World War, and then collapsing with the crisis of the Gold Standard in the late 1920's and early 1930's.
The "Second Era of Globalization" accompanies a movement in economic thought called "Neo-Liberalism", which argues that in a world of floating exchange rates, it is economically ineffective for nations to use regulation to protect their internal markets, and that it is impossible to maintain economic autonomy and monetary policy autonomy. See Mundell-Fleming Model.
This period is generally what is referred to by the word "Globalization" in the present.
Globalization in this era has been driven by Trade Negotiation Rounds, which lead to a series of agreements to remove restrictions on "Free Trade", the Uraguay round led to a treaty to create the World Trade Organization or WTO, to mediate trade disputes. Other bilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.
Proponents claim that this leads to lower prices, more employment and better allocation of resources. Sympathetic critics point out that the results of Globalization have not been what was predicted when the attempt to increase free trade began, and that many institutions involved in the system of Globalization have not taken the interests of poorer nations and labor into account. Unsympathetic critics link globalization with corporatization, and the increasing autonomy of corporate entities to force nation-states to bend political policy to the will of corporate entities. Many conferences between trade and finance ministers of the core globalizing nations have been met with large, and sometimes violent, protests from opponents of "corporate globalism".
Signs of Globalization
Globalization has become identified with a number of trends, most of which have developed since World War II. These include greater international movement of commodities, money, information, and people; and the development of technology, organizations, legal systems, and infrastructures to allow this movement. More specifically, globalization refers to:
- Increase in international trade at a faster rate than the growth in the world economy
- Increase in international flow of capital including foreign direct investment
- Greater transborder data flow, using such technologies such as the Internet, Communication satellites and telephones
- Greater international cultural exchange, for example through the export of Hollywood and Bollywood movies.
- Spreading of multiculturalism and better individual access to cultural diversity, with on the other hand, some reduction in diversity through assimilation, hybridization, Westernisation, Americanization or Sinosization of cultures.
- Erosion of national sovereignty and national borders through international agreements leading to organizations like the WTO
- Greater international travel and tourism
- Greater immigration, including illegal immigration
- Development of global telecommunications infrastructure
- Development of a global financial systems
- Increase in the share of the world economy controlled by multinational corporations
- Increased role of international organizations such as WTO, WIPO, IMF that deal with international transactions
- Increase in the number of standards applied globally; e.g. copyright laws
- Creation of local clusters of competence (Porter's clusters) having a world wide competitive advantage
Global trade or still international / multilateral trade?
Barriers to international trade have been considerably lowered since World War II through international agreements such as the General Agreement on Tariffs and Trade (GATT). Particular initiatives carried out as a result of GATT and the WTO, for which GATT is the foundation, have included:
- Promotion of free trade
- Intellectual Property Restrictions
Various aspects of globalization are seen as harmful by anti-globalization, public-interest activists. There is a wide variety of different kinds of "anti-globalization." Almost no activists favor getting rid of globalization completely. Rather, the main opposition is to unfettered (free market) globalization guided by governments and quasi-governments such as the International Monetary Fund and the World Bank) that are not held responsible to the populations that they govern and instead respond mostly to the intests of corporations.
See also: Anti-globalization movements
Globalization in question
There is much academic discussion about whether globalization is a real phenomenon or only a myth. Although the term is widespread, many authors argue that the characteristics of the phenomenon have already been seen at other moments in history. Also, many note that those features that make people believe we are in the process of globalization, including the increase in international trade and the greater role of multinational corporations, are not as deeply established as they may appear. Thus, many authors prefer the use of the term internationalization rather than globalization. To put it simply, the role of the state and the importance of nations are greater in internationalization, while globalization in its complete form eliminates nation states. So, these authors see that the frontiers of countries, in a broad sense, are far from being dissolved, and therefore this radical globalization process is not yet happening, and probably won't happen, considering that in world history, internationalization never turned into globalization.